Despite being served with a major notice of nonpayment in the form of a nearly $8 million mechanics lien, Alabama contractor TK Electric, LLC is challenging the charge, instead claiming breach of contract on the part of filing party Genesys Systems Integrator

According to an October 4, 2021, counterclaim filed in Georgia State-Wide Business Court, the company is disputing Genesys Systems Integrator’s claim that it owes $7,932,953 for pipework done on a Commerce, Georgia SK Battery America electric vehicle battery plant.

TK Electric alleged that GSI’s original mechanics lien claim on the project was “wrongful,” noting that the claim had a significant negative impact on its reputation with project owner SK Battery America and general contractor Sys-Con LLC.

“GSI breached its contract [sic] obligations by failing to timely, properly and completely perform the work which GSI had agreed to do,” the company additionally claimed.

GSI originally filed its mechanics lien against TK Electric on April 26, 2021, but canceled it in July 2021, with the dispute finding its way to Jackson County Superior Court and Georgia State-Wide Business Court in August 2021. The company claimed that TK Electric had failed to make on-time payments and refused to “fully compensate” the company for its work.

According to GSI’s original complaint against TK Electric, the company — which focuses on engineering, fabrication, and installation — started working on the SK Battery America project in September 2020, installing piping for the battery plant on a contract totaling nearly $2.3 million.

However, the contractor missed October 2020 and November 2020 deadlines for the project, claiming “reasons beyond its control” and accusing TK Electric of delaying the project. It eventually completed its work on February 2, 2021.

SK Battery America plant has seen a large number of issues with contractors and nonpayment

Even outside of the dispute between TK Electric and Genesys Systems Integrator, the Commerce, Georgia plant has seen more than its share of problems in the past few years.

2020 saw tension between TK Electric and workers from Commerce’s local chapter of labor organization United Association of Journeymen and Apprentices of Plumbing and Pipe Fitting.

According to a group claiming to represent the affected workers — “TK Workers Fighting for Justice” — TK Electric “unlawfully ended its project labor agreement/collective bargaining agreement with Local 72” on September 23, 2020, later choosing to lay off the remainder of its employees that were represented by the union “because of their membership in or support for [the Local 72 union chapter].”

TK Electric then filed a signed charge against the union on November 6, 2020, alleging “coercion” including statements and violence on the part of the chapter.

However, the National Labor Relations Board dismissed the case on December 7, 2020.

Millions of dollars in alleged nonpayment weighs over the project beyond TK Electric, as well. 

An August 19, 2021, action filed by Kee Construction claimed that it provided welding and pipefitting services to contractor Industrial Project Innovation, LLC but failed to receive payment for its work — now leading it to claim $495,398.87. The company originally claimed the amount as part of a June 17, 2021, lien claim against the property.

According to Kee Construction, however, the issue goes beyond its claim against Industrial Project Innovation. 

The company additionally claimed that the Jackson County Industrial Development Authority failed to secure a payment bond on the project, and is now liable for Industrial Project Innovation’s failure to supply payment, alleging that “JCIDA acted in bad faith in letting a substantial public works contract without procuring a payment bond for [Kee Construction].”

There have been some additional liens and notices of nonpayment filed on the project as well that haven’t yet made it to the same level of legal action as others: Plateau Excavation, Inc. filed a lien on the property for $1,027,956.65 on July 8, 2021, while 2020 saw even more issues. Wellins, Inc. filed a lien claim for $5,452,575.53 in nonpayment against the property on July 9, 2020, while January 15, 2020, saw Faith Technologies, Inc. file two separate liens claiming $193,133 and $50,953 in nonpayment, respectively.

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Delays & disputes at the SK Battery America plant may add to pressure on the clean energy battery production industry

Though these disputes impact contractors most significantly, they show how significant small issues can be in a larger community. Any delays or disputes on the SK Battery America plant could add to the pressure currently felt on the battery production industry.

A recent report from the German-based Center for Automotive Research noted that the world is currently seeing a major shortage of batteries for electric vehicles, saying that “With the U.S. plan to expand electromobility on a very large scale, the European CO2 (carbon dioxide) regulations and the transition to electric cars in China, the demand for electric cars and thus lithium-ion batteries is increasing significantly.”

Shortages in the battery supply chain could have a significant impact on the vehicle manufacturing industry as a whole. The report added that “For the years 2022 to 2029, we expect a shortage of the supply of new vehicles totaling 18.7 million cars due to the limited capacity for lithium-ion battery cells. After that, sufficient cell production capacities will be available.”

Every plant that is operational could help to benefit the situation, as new construction can be slow, with the center noting that “Although considerable production capacities for lithium-ion cells are being built up in the US, Europe, and China, the construction of the cell factories takes time.”